The crisis rocking the U.S. financial sector is rippling into the clean-energy business, bruising more mature industries like wind while leaving young start-ups relatively untouched so far.

The unraveling of debt-heavy investment banking firms--including the demise this week of Wall Street icons Lehman Brothers and Merrill Lynch--means that financing for large-scale renewable energy projects will get harder and more expensive, according to analysts.

"This isn't good news for anybody--it's going to have an impact economy-wide," said Ethan Zindler, head of north American research at New Energy Finance.

New Energy Finance's clean-energy stock index is down about one third so far this year--lower than the Dow--and the sector has been volatile, Zindler noted.

Lehman and Merrill Lynch were involving in financing clean-energy deals, but to a far lesser extent than Goldman Sachs, JP Morgan, and General Electric's renewable-energy financing arm.

"If you look at the other investment banks, their survival is probably more critical to clean energy," Zindler said.

Because it is the most mature, wind energy will likely get hit hardest by a squeeze on credit. Wind farms rely on project finance from banks or other institutions to fund construction and development.

But with fewer investment banks offering financing amid strong demand, wind project developers may get less favorable terms, ultimately making the energy from those projects more expensive.

Solar and geothermal projects often use the same funding mechanism of project financing and a government tax credit. That subsidy program is set to expire at the end of this year, creating more uncertainty.

At an event to announce a Google-General Electric energy policy and technology partnership on Wednesday, GE CEO Jeffrey Immelt said that the financial crisis may affect the company's energy interests, which includes a multi-billion dollar wind turbine business.

"People need to be concerned. This needs to be worked through and resolved because it's hard to have a springboard to do other things when everything intersects with financial services," Immelt said.

VCs still flush
Whereas companies that rely on public markets for financing have less attractive options, the private equity side of the business hasn't yet shown the same signs of distress.

Energy technology companies and projects typically require a lot more capital to develop and commercialize than, say, a software venture. Several start-up biofuels or solar companies have raised tens or hundreds of millions of dollars to scale their technology to commercial level.

In fact, over 90 percent of venture capitalists and investors expect investment in green technology to increase in 2009, according to the results of a KPMG survey of 301 VCs scheduled to be published next week.

About two thirds of respondents said that the green tech investment cycle is sustainable, and not a bubble as many fear.

In general, early-stage investors say long-term trends point to demand for clean technologies and supportive government policies.

The same is true for the clean-energy sector, overall, even for those companies now vulnerable to the public-market turmoil, Zindler said.

"If you take the long view, the sector is a good place to be," he said. "But the big caveat is that we're just in the third or fourth inning of this."